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Jan 26, 2012

The research service introduces the relevance of MSME Loans Market
for NBFCs in India. Frost & Sullivan believes that with the
emergence of newer business models to tap bottom of pyramid, NBFCs loan
disbursals to MSMEs has grown at a rapid rate from FY 2009 to FY 2011.
Further, drivers, restraints, and challenges are analyzed. Following
that, estimates of current and forecasted market size and market share
analysis is provided. Company profiles of the top NBFC companies and End
user analysis is studied. The conclusions represents the SWOT analysis
of the NBFC market and recommended strategies to ensure a profitable
future.

Executive Summary

Importance of MSMEs

Micro, small and medium enterprises (MSMEs) are significant growth drivers of the Indian economy.

MSMEs
provide employment to about xx crore persons across x.x crore units.
MSMEs contribute to xx percent of the manufacturing output and to xx
percent of exports*.

Despite this obvious importance of MSMEs to
the Indian economy, government departments, SIDBI and the RBI have not
been able to reach out to the majority of MSMEs. It is estimated that
only about x percent of unregistered and 10 percent of registered MSMEs
have access to finance from banks and financial institutions (organized
sector).

One of the biggest challenges faced by the MSMEs in India is the inadequate and delayed access to quality credit.

Traditionally,
primary lenders to MSME segments have been local moneylenders in the
unorganized sector. Credit from unorganised sector is not only
unreliable but also intermittent and expensive. MSME segment thus
provides significant untapped market potential for NBFCs.